Chicago Jobs With Justice – Chicago Newstips by Community Media Workshop http://www.newstips.org Chicago Community Stories Mon, 14 Jul 2014 17:31:05 +0000 en-US hourly 1 https://wordpress.org/?v=4.4.12 In Bronzeville: school closings, violence, Wal-Mart, and TIFs http://www.newstips.org/2013/05/at-overton-school-closings-violence-wal-mart-and-tifs/ Wed, 15 May 2013 00:58:22 +0000 http://www.newstips.org/?p=7199 Two actions protested the closing of Overton Elementary in Bronzeville today — a morning rally highlighting safety issues (and much more), and an afternoon action, which raised larger issues of resources by drawing the connection to a Walmart being built nearby with TIF funds.

About a hundred parents marched from Overton, at 49th and Indiana, to Mollison, at 44th and King  — past four gangs and four drug locations, according to Francis Newman, a parent from Williams Prep, which is also on the school closing list.

The walk also took them past the spot where Columbia College student Kevin Ambrose was shot and killed last week, she noted.

“We’re demanding these schools be kept open and that they get the resources they need,” Newman said.  She said she recently visited Disney Magnet school, which has numerous computers, smart boards, and iPads for children.  “In our school, we can’t get a computer that works,” she said.

The real status-quo

The idea that “schools are under-resourced because they’re underutilized is a lie that is used to validate the status quo,” said Jeanette Taylor, an LSC member at Mollison and a leader with the Kenwood Oakland Community Organization.  “The status quo in Chicago is closing schools.”

Several parents discussed schools that had struggled after repeatedly receiving students from closing schools and are still being subject to school actions.

A hearing officer has recommended keeping Overton open, challenging CPS’s assertion that Mollison is a higher-performing school, which is based on its highly technical system of performance points.

“Closing this school to bring children from Overton to Mollison doesn’t sound like education reform it me, is sounds like sabotage,” Taylor said.

Overton parent Darlene Johnson said she served as a Safe Passage worker at Dyett High School last year.  “A boy walked past us, turned the corner, and was shot,” she said.

She also raised the issue of budget priorities:  “We say no money to McCormick Place for a DePaul arena, no TIF money for Wal-Mart — and why does that rich lady that used to be on the school board need all that TIF money?”  She was referring to Penny Pritzker.

Wal-Mart connections

That was also the theme of an afternoon rally that started at the school and ended at the site of a new Wal-Mart at 47th and King Drive, featuring Wal-Mart workers from OUR Wal-Mart and Warehouse Workers for Justice, along with the Chicago Teachers Union and Chicago Jobs With Justice.

The Walmart development on 47th is being subsidized with $13 million in TIF money, on top of an $11 million TIF subsidy for a new Walmart in Pullman, organizers said.  On top of that, the Walton family foundation gave close to a half-million dollars to finance CPS’s school closing “community engagement”  (including advertising).

Walmart’s owners have also given $22 million to charters in Chicago — their largest investment in charters in the nation — organizers said.

The world’s largest employer — and the nation’s wealthiest family — “can afford to build their own store without our tax dollars,” said Susan Hurley of JWJ.  “That money should be going to our schools.  We could save a lot of schools with $24 million.

“And they need to do a lot better by their workers before they start telling us how to run our schools.”

“Why does Walmart and the Walton Family, who don’t live in Chicago, have more say about our schools than the people who send their children there?” asked Kristine Mayle of CTU.  “It’s because they have the same agenda as the mayor, which is … to privatize them.”

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Walmart turns 50 http://www.newstips.org/2012/06/walmart-turns-50/ Fri, 29 Jun 2012 22:54:40 +0000 http://www.newstips.org/?p=6403 A coalition of Walmart workers, community groups, and small businesses is throwing a 50th birthday party for the retail giant.

In that spirit, here’s a story from Walmart’s earliest days (related at length here a few years ago): At the time of Walmart’s founding in July 1962, President John Kennedy passed a law extending the minimum wage to retail workers – with a loophole for companies earning less than $250,000.  Sam Walton promptly divided his stores into individual companies so they could be exempt.

On Saturday, community activists will pass out birthday cupcakes outside the Walmart Express at Presidential Towers, and Walmart workers — employees of local stores who are part of the new OUR Walmart group, along with members of Warehouse Workers for Justice — will tell stories of low wages, unaffordable health coverage, and wage theft.

It takes place a 10 a.m. on Saturday, June 30, at 570 W. Monroe.

“The past 50 years have really not been great for our economy, and Walmart’s growth is not unrelated to that,” said Janel Bailey of Chicago Neighborhoods First, a coalition of labor, community groups, and small business.

“Because they’re such a large employer, their model has had an impact throughout the retail industry and throughout the economy,” said Susan Hurley of Chicago Jobs With Justice.  “What they have done to the standard of living of working people has been dramatic and quite harmful.”

With the closing of Walmart departments and stores where employees have voted for union representation, thousands of workers across the country are now coming together in OUR Walmart (it stands for Organization United for Respect at Walmart).  It’s a nonunion association, as is Warehouse Workers for Justice.

And because previous efforts to block Walmart’s entry into Chicago failed – the company is pioneering a smaller format, the Neighborhood Market, allowing it to move into properties already zoned commercial without the public oversight required for big box developments, Hurley points out – local activists are focusing on supporting Walmart workers and “reforming” the company.

Food deserts and food stamps

While the company talked about filling “food deserts,” nearly all its Chicago stores are in affluent areas downtown or on the North Side – and its Walmart Express in Chatham is in an area with a thriving business district.

“The food desert talk was a red herring, part of the p.r. push to get into the city,” said Bailey.

“Food deserts are only part of the story,” she said.  “Areas that lack food access also lack access to good jobs.  Food deserts are also living wage deserts.  The problem is that if you’re not paying a living wage, you’re not really solving the problem of access to food.”

Indeed, half of all Walmart employees qualify for food stamps – not a strong sign that access to food is high on the company’s priorities.  (With Walmart now accepting food stamps, Newstips pointed out a couple years ago, “the money paid by taxpayers to supplement Walmart’s low wages can now be spent at Walmart, contributing even further to the Walton family’s riches.”)

On top of that, it’s estimated that $225 million is spent nationally on free and reduced school lunches for children of Walmart employees.

Meanwhile, in recent years Illinois has led the nation in tax subsidies to Walmart.  That’s in addition to providing Medicaid for many of the company’s employees.

In another 50th anniversary event, Interfaith Worker Justice is holding a prayer vigil on Friday, July 6 at 6:30 p.m. at the Walmart at 3636 N. Broadway.  The group is calling on the company to mark its anniversary by finding ways to “give back for the sake of the neighborhood.”

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’99 Percent’ vs. CME tax break http://www.newstips.org/2011/10/99-percent-vs-cme-tax-break/ Tue, 25 Oct 2011 21:10:57 +0000 http://www.newstips.org/?p=4856 CME has been successfully bidding for the attention of Illinois politicians – and now regular folks are starting to notice.

On Tuesday, a statewide allliance is protesting at City Hall and then marching to State Senate President John Cullerton’s office to protest his legislation granting a $50 million tax break to CME, owner of the Chicago Mercantile Exchange and Chicago Board of Trade.

On Wednesday, a coalition of community and labor groups will launch a campaign to derail CME’s tax break – and press for a small financial transaction tax on CME trades – with a march on protest at the Chicago Board of Trade and a stand with Occupy Chicago.

“It’s a shakedown,” said Mehrdad Azemun of National Peoples Action, of the new tax break.  NPA is one of several regional and statewide networks of community and church groups that are joining to protest the measure on Tuesday.

“Corporations as large as these need to pay their fair share, especially at a time when every day brings news of more cuts to state and city programs, more police stations being closed.”

He points out that just a few years ago, CME threatened to leave – and then promised to stay, after it received a $15 million TIF subsidy and millions more in property tax breaks.

“Our sense is that the state leaders and the Chicago mayor are just giving in to threat after threat,” he said.  “It’s really not a responsible way to govern – and it’s not a responsible way to run a budget.”

To Cullerton and Mayor Emanuel, who have made the tax break a top priority for the veto session, Rev. Marilyn Pagan Banks of Northside POWER said, “We are demanding that you reverse your position, and stop acting only for the 1 percent.  We need you to stand with the 99 percent.”

On Wednesday, the community-labor coalition Stand Up Chicago will march from the Chase Plaza at Dearborn and Monroe (starting at 11:45 a.m.) and join Occupy Chicago at LaSalle and Jackson for a press conference.  Members of Workers United will be donating winter wear and sleeping bags to Occupy Chicago.

Speakers will include Workers United president Noel Beasley.

They’ll proceed for more activity across the street to the Chicago Board of Trade, where they’ll protest Cullerton’s tax break and continue building a campaign for a financial transaction tax.

“In this age of austerity, it’s obvious that we can’t afford to be offering more tax breaks to corporations that are most assuredly in the black,” said Susan Hurley of Chicago Jobs with Justice, part of the Stand Up coalition.  (CME’s profits last year were over $950 million, and they’re even higher this year.)

“And we need to create tax instruments to generate funds to keep our ship of state afloat,” she added.

The transaction tax – just 25 cents on an average trade of $233,000 – would be charged to traders, not the exchanges themselves.  But with 12 million trades a day, the fee would generate over a billion dollars a year, supporters say.  (See our earlier report for more detail.)

Cullerton’s tax break would also apply to the Chicago Board of Options Exchange; with additional tax breaks in the legislation, its total cost could be $100 million a year.  The transaction tax would also apply to trades on the CBOE.

NPA’s Azemun and Stand’s Catherine Murrell said members of their coalitions would be contacting their legislators to oppose Cullerton’s bill.

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‘An amazing convergence’ http://www.newstips.org/2011/10/an-amazing-convergence/ Thu, 13 Oct 2011 22:34:42 +0000 http://www.newstips.org/?p=4821 It’s been a remarkable week in Chicago, a nonstop whirl of protests targeting the financial industry and government collusion with corporations, and demanding action on jobs, housing, and schools.

Coming Friday:  a rally for “jobs not cuts,” with MoveOn, Stand Up Chicago, Chicago Jobs With Justice and Occupy Chicago joining forces, at noon at the Federal Plaza.

Occupy Chicago gets much credit for capturing the public’s imagination – and for their 24-7 commitment and important organizational innovations.  But it was community groups and unions that staged some of the most dramatic and creative actions here this week.

“It’s an amazing convergence,” said Adam Kader of Arise Chicago.

It was activists from National People’s Action who kayaked down the Chicago River, past the Mortgage Bankers Assocation meeting, dressed as Robin Hood, on Monday.

It was Rev. Patrick Daymond of Southsiders Organized for Unity and Liberation and others who “embedded” themselves in an MBA session and took the floor there.  “We asked how they could sleep at night,” Dayden said, according to Progress Illinois.  “We asked how they can show their faces in Chicago knowing the devastation they have brought to our communities.”

On Tuesday, it was Action Now members who dumped garbage taken from a foreclosed, bank-owned inadequately-secured West Side home on the floor of Bank of America (five women aged 56 to 80 were arrested in the action).

Also Tuesday, Brighton Park Neighborhood Council members boarded up a vacant home owned by JPM Chase and brought a bill for the work to the bank’s downtown office; Albany Park Neighborhood Council members protested at the Chicago Association of Realtors.

Outside the MBA meeting, members of the Jewish Council on Urban Affairs erected a sukkah, inviting MBA participants inside the ritual shelter (constructed for Sukkot, the holiday which marks the Israelite’s period of homeless wandering in the desert) to hear personal testimony from victims of the housing crisis.

Members of SOUL were arrested trying to enter the MBA conference.

On Wednesday, it was the Grassroots Collaborative which set up a giant Slushie – symbolizing the use of TIF as a corporate slush fund – and then held a “corporate welfare” trolley tour of downtown TIF subsidy recipients.

Also Wednesday, 100 teachers marched through the lobby of Bank of America, demanding the bank renegotiate “toxic rate swaps” they say are robbing Chicago schools of millions of dollars.

Thursday there was a series of protests at low-wage employers – and in the afternoon, Stand Up Chicago set up a casino outside the Chicago Board of Trade while demanding a financial transaction tax to pay for a Chicago Jobs Fund (discussed here last Saturday).

“It feels different,” said Kader, who’s been involved with Stand Up Chicago in planning the week’s actions – timed for two financial industry summits – for several months.  “In the past we would turn out our members,” but this time he’s been struck by the number of unaffiliated folks and passersby joining in.  “There’s something out there, and we just have to say here’s a time and place to come together.”

Media attention was notably greater than past protests – for example, see this Newstip on “anemic” local coverage of NPA’s 5,000-strong demostration at the American Bankers Association here in October 2009.

Only Mary Bottari of the Center for Media Democracy notes another convergence, tying the week’s protests to Mayor Emanuel’s efforts “to balance budget deficits on the back of public workers.”  (She also notes the recent revelation of Emanuel’s role as White House chief of staff in dissuading President Obama from his initial inclination to break up big banks, which progressives argue became dangerously oversized after the wall between commercial and investment banking was torn down in 2000.  Since then they’ve gotten bigger.)

What happens now?  Van Jones of Rebuild The Dream sees a period of “innovation and improvisation.”  He tells Alternet that Occupy Wall Street “is a huge, big deal; there will be other huge, big deals. There is a big thaw happening.  People have gone through a grieving process, and people want to fight.”

“The economic crisis [will get] worse,” says Jones, and “you’re going to have a lot of people suffering due to the economy.  That’s going to create a need for a response….That’s going to be a driver of innovation, the economic crisis.  People have to eat.  People have to live indoors.  People aren’t going to just lay down and die because Wall Street wants to hold up the economic recovery.”

His group has called for nationwide actions – leaving the details up to local groups – on November 17 on the theme of “jobs not cuts.”  Before that, according to Think Progress, a new group  has called for actions around the world to “demand true democracy” – on Saturday, October 15.  They report actions planned in over 800 cities in 71 countries.

And they’ve posted a short video highlighting the year in protests: Tunisia, Egypt, Spain, Greece, Israel, New York.  Who knows what’s next?  And as Phil Rosenthal points out in the Tribune, “one can only imagine what will greet visiting leaders in Chicago for the G8 and NATO summits next May.”

Take Back Chicago shows what can happen when diligent, energetic organizing, rooted in communities, aligns with the zeitgeist.

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This could be the start of something big http://www.newstips.org/2011/10/this-could-be-the-start-of-something-big/ http://www.newstips.org/2011/10/this-could-be-the-start-of-something-big/#comments Fri, 07 Oct 2011 19:57:14 +0000 http://www.newstips.org/?p=4789 New and old strands of youth, community, labor and peace organizing – voicing growing anger over the state of our economy and our democracy – will come together in a series of events here over the next week, with thousands expected for a major Columbus Day demonstration.

Holding their ground outside the Federal Reserve on LaSalle Street, Occupy Chicago – one of many ongoing actions inspired by Occupy Wall Street, which is now backed by the AFL-CIO – has brought new momentum and visibility to concerns that labor-community coalitions have been pressing since the 2008 bank bailout.

The Tribune reports that Occupy Chicago’s numbers are growing; In These Times has the inside story. We Are The 99 Percent offers the demonstrators’ own pointed and poignant tales.

On Friday, October 7, Stand Up Chicago and the Chicago Political Economy Group are releasing a report analyzing unemployment in Chicago and proposing a Chicago Community Jobs Fund to create 40,000 jobs (more below).

Also Friday, Chicago Jobs With Justice (which celebrates its 20th anniversary Tuesday) is holding its monthly unemployment report event, pointing out that of 100,000 jobs added last month, half were striking Verizon workers returning to their jobs.  “The private sector cannot create jobs in a weak economy with little demand,” said Susan Hurley.  “We can only create jobs with major federal investment.”

On Saturday, October 8, Occupy Chicago will join scores of groups protesting the tenth anniversary of the war in Afghanistan.  They’ll rally at noon at Michigan and Congress; speakers include Alejandro Villatoro of Iraq Veterans Against the War, who recently returned from a deployment in Afghanistan; Mary Dean of Voices for Creative Nonviolence, who spent a month in Afghanistan this summer; and former Chicago activist, Black Agenda Report editor Bruce Dixon.

They’ll march past Obama 2012 campaign headquarters at the Prudential Building, where they’ve held a two-day vigil, and end up joining Occupy Chicago at the Federal Reserve building at Jackson and LaSalle.

The cost of the war is now approaching $500 billion, by one calculation.

On Monday, thousands of Chicagoans – people “fed up with big bank greed and Wall Street corrupting our democracy” — will protest at two financial industry conventions and converge for a mass rally at the Art Institute, sponsored by the Take Back Chicago coalition.  Their goal:  “To begin taking back the jobs, homes, and schools stolen from us by the greed of big banks and big business.”

Local groups belonging to National Peoples Action will protest outside the annual conference of the Mortgage Bankers of America at the Hyatt Regency, Wacker and Stetson, at 4 p.m.  MBA includes the nation’s largest banks along with independent mortgage companies.

Protestors will demand that banks reduce principals on all underwater mortgages in order to stop foreclosures and spur the economy (see Newstips, Communities to Banks: You can fix housing crisis, economy).

Also at 4 on Monday, college students will protest at the Futures and Options Expo (which includes the Chicago Mercantile Exchange) at the Chicago Hilton at Balbo and Michigan.  “We’re going to the source – to the people who have hurt us in this recession,” said Haley Leibovitz, a Roosevelt University student active in Next Up Chicago, a network of young labor activists.

At the same time, the Chicago Teachers Union will rally at the Chicago Board of Trade, where $15 million of TIF money was spent on remodeling, and labor groups will rally for jobs at the Daley Plaza and the Federal Plaza – all marching to the Art Institute at 5 p.m., where the Futures Expo holds its opening reception.

Further actions, focused on taking back jobs, homes, and schools, will continue through the week.

A new report analyzes unemployment in Chicago and proposes a plan to add 40,000 jobs here.  Chicago has been particularly hard hit by the jobs crisis, according to the report; unemployment is double what it was five years ago, and remains in double digits.  “Chicago is rapidly losing its jobs base” and the stability it brings to communities and families, according to the report.

Over 272,000 Chicagoans are unemployed, with strong negative ripple effects – foreclosures up, vacancies and crime up, property values and local government revenues down, and cuts to education and public safety.  Nearly two-thirds of unemployed workers come from the service sector.

Researchers interviewed 14,000 unemployed Chicagoans and found they identified lack of jobs, particularly youth jobs, as a root cause of many community problems.

The report proposes a series of Chicago job corps focused on the social infrastructure – schools, health care, child care, neighborhood improvement and youth.

They’d pay for it with a financial speculation fee of 25 cents for each futures or options contract sold on the Chicago Mercantile Exchange or the Chicago Options Exchange.

Since the average contract is valued at $233,000, a 25-cent charge would have no impact on trades – but since over 12 million such contracts are executed each day, it would generate nearly $1.4 billion a year, based on last year’s trading volume.

It would be paid by traders, not by the exchanges;  it would cover financial instruments licensed to Chicago exchanges, which cannot be traded elsewhere.  (See Newstips 6-12-11 re. CME’s ongoing threats to leave the state unless they get a tax break.)

The Tribune recently reported that Bill Gates now backs a financial transaction fee, and in his new book, Ron Susskind reports that President Obama originally favored such a fee, but was blocked by advisers.

Last year 25 aldermen backed a hearing on a proposal for a voter referendum on instituting a financial transaction tax, but it was never brought to the Council floor.  Ald. Richard Mell proposed such a fee in the ’90s.

“Our city is facing a massive jobs crisis, one that requires direct and targeted job creation for those groups and communities hit hardest by unemployment,” according to the report.

“Our jobs plan will not only provide 40,000 Chicagoans with living wage, full-time jobs that match their existing skills and experience, but will serve as an investment in our communities, making them safer, stronger and more vibrant.”

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Chicago In These Times http://www.newstips.org/2011/06/chicago-in-these-times/ Wed, 22 Jun 2011 20:38:10 +0000 http://www.newstips.org/?p=4039 As a national publication based in Chicago, In These Times often provides better coverage of the local scene than its rivals – but this week’s issue seems particularly noteworthy on that account.

There’s an interview with Kathy Kelly of Voices for Creative Nonviolence on why she’s joining the flotilla challenging the Israeli blockade of Gaza later this month; she also shares her views on Libya, Afghanistan, and the proliferation of drone technology.

There’s Kari Lydersen’s article (not yet online) on the growing relationship between steelworkers here and in Mexico, boosted by connections between the century-old Mexican community around Chicago mills and workers in Mexico. Blanca Morales came here from Monterrey when she was five and ended up working at Inland Steel for 25 years; now she’s part of Women of Steel, providing support for Mexican strikers who face brutal retaliation.

Steelworkers here point out that supporting steelworkers in Mexico – where the average manufacturing wage is under $4 an hour – will help “level the playing field” and reduce pressure on wages and working conditions here.

Yana Kunichoff reports on the Unemployed Action Center organized by Chicago Jobs With Justice, which is planning a partnership with the Chicago Anti-Eviction Campaign to fight foreclosures and evictions.

Theo Anderson highlights the work of Protestants for the Common Good, lobbying for legislation to help ex-offenders, and Interfaith Workers Justice, fighting wage theft, as examples of “the re-emergence of the religious left as a powerful political force.”

Stephanie Shonekan of Columbia College shares her reflections on living in Naperville: “We found great neighbors and formed lifelong friendships with people whom I would never have known in my other walks of life.  And the greatest lesson learned has come from the reflections on race inspired by the very acute experience of being a black person in a privileged white neighborhood.”

There are offerings from two of Chicago’s journalistic greats: David Moberg with another go at how unions can save America, and Salim Muwakkil on the controversy over Manning Marable’s new biography of Malcolm X.

Finally there’s Chris Lehmann writing about the depature of Oprah Winfrey from daytime television, and why “the grinding spectacle of Oprah’s farewell felt much more like an infomercial for feeling something, anything, rather than an actual outpouring of human emotion.”

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Rally at Republic http://www.newstips.org/2008/12/rally-at-republic/ Sun, 07 Dec 2008 06:00:00 +0000 http://communitymediaworkshop.org/newstips/?p=3029 It was the workers who made these windows,” said Rep. Luis Gutierrez at Republic Windows and Doors yesterday. “These windows belong to the workers until they are paid for.”

He spoke during a rally of Republic workers and supporters in the cold and snow outside the occupied factory Saturday afternoon. Supporters included members of Teamsters, SEIU, UAW, AFSCME, United Steelworkers, and the Chicago Teachers Union. Republic workers are represented by United Electrical Workers Local 1110.

Federal law requires 60 days of pay — and state law requires 75 — when a plant is shut down without notice, Gutierrez said. It also mandates continued health coverage for that period, he emphasized.

Workers’ anger was fueled by the announcement that vacation and legally-mandated severance pay would not be forthcoming — according to union, the company’s bank, Bank of America, refused to allow the payments. (Bank officials have denied the charge.) Earlier the union had denounced Bank of America for failing to use $25 billion in federal bailout funds to maintain credit for businesses. There is widespread consensus supporting that charge.

Gutierrez said he had contacted state regulators and that they are prepared to use all their investigatory powers, including examining tax records and subpoenaing financial records, if the state’s plant closing notification law isn’t followed.

Carl Rosen, regional president of UE, said the union would file a complaint Monday.

“I don’t believe somebody woke up Tuesday morning and decided to close this plant,” Gutierrez said. “I believe somebody knew this was going to happen and wanted to walk away without paying what the law requires — and we are going to make sure that the law is enforced.”

He added: “If they are violating the law they should be prosecuted to the fullest extent of the law.”

Gutierrez said Republic Window officials, who skipped a Friday meeting called by the congressman, had agreed to a Monday meeting and had signed a financial confidentiality waiver.

Rosen said if no settlement is reached at that meeting, workers and supporters would protest at Bank of America’s LaSalle Street office on Tuesday.

“This is broad-daylight theft,” said James Thindwa of Chicago Jobs With Justice. “They are taking money from workers that they have earned.”

“I believe this is not fair, what the company is doing to the employees,” said Lalo Munoz, the plant’s most senior worker, with 34 years at Republic.

“We are going to stay here until we have answers,” he said. “I hope Bank of America will try to resolve the problem.”

“We’re not just losing our jobs — some employees are going to lose their homes, too,” Munoz said, pointing out that they face a job market with cascading unemployment.

Rev. C. J. Hawking of the Chicago Interfaith Committee on Worker Issues invoked the memory of Flint sit-down strikers and the sit-ins of the civil rights movement as “examples that sitting down is a way of standing up.”

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Bailout – 7 http://www.newstips.org/2008/09/bailout-8/ Tue, 30 Sep 2008 17:33:45 +0000 http://communitymediaworkshop.org/newstips/?p=290 As Congress ponders possible reconsideration of the Paulson bailout package, local housing experts say it would have limited impact on the growing foreclosure crisis (more here).

Meanwhile, Chicago Jobs With Justice has called a rally tomorrow at the Federal Reserve Bank, 230 S. LaSalle, to demand that any legislative action include requiring that Wall Street be held responsible for paying for any bailout, to avoid cuts to other programs; an economic recovery plan that includes job creation; and real foreclosure and bankruptcy reform that protects homeowners and consumers (Wednesday, October 1, at 12 noon).

[UPDATE]  The weakness of the financial sector is not the main problem facing the economy, writes economist Dean Baker. “We would still be facing a recession even if all our banks were flush with cash. Hence the hype about the urgency of the bailout was an invention.”

“The main cause of the economy’s weakness is not insolvent banks and lack of credit; it’s the loss of $4 trillion to $5 trillion in housing equity as a result of the bubble’s partial deflation. Families used their equity to support their consumption in the years from 2002 to 2007, as the savings rate fell to almost zero.

“With much of this equity now eliminated by the collapse of the bubble, many families can no longer sustain their levels of consumption. The main reason that banks won’t lend to these families is that they no longer have home equity to serve as collateral. It wouldn’t matter how much money the banks had, they are not going to make mortgage loans to people who have no equity.

“And house prices are not going to come back….We are not going to get the price of $200,000 homes in central California back up to $500,000.

“The main problem in recovering from the recession will be finding ways to boost demand other than household consumption. In the longer run, this will mean reducing imports and increasing exports. In the short run, we will have to rely on government stimulus to help spur growth and reduce unemployment. The Democratic demands for stimulus were not extraneous to the legitimate goal of a bank bailout bill. Fiscal stimulus must be central to any serious effort to boost the economy.

“The weakness of the banks contributes to the downturn, but they are not the core of the problem. We would still be facing a recession even if all our banks were flush with cash. Hence the hype about the urgency of the bailout was an invention. It would be good to get our banks in order, but it also would be good to send $100 billion to state and local governments to support infrastructure projects and other spending.

“How do we go about getting the banks in order? Almost every economist I know rejects the Paulson approach and argues instead for directly injecting capital into the banks. The taxpayers give them the money and then we own some, or all, of the bank. (That’s what Warren Buffet did with Goldman Sachs.)

“This isn’t about begging for a sliver of equity as a concession for a $700 billion bailout, this is about constructing a bank rescue the way that business people would do it. We have an interest in a well-operating financial system. There is zero public interest in giving away taxpayer dollars to the Wall Street banks and their executives.

“If Secretary Paulson constructed a package that was centered around buying direct equity stakes in the banks, he could quickly garner large majority support in both houses. Better yet, Congress could just construct its own package centered on buying equity stakes and send it to President Bush. If he balks, we can just threaten him with stories about the Great Depression.”

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